Regulators back off on Internet rift

WASHINGTON (AP) Federal regulators have chosen a wait-and-see attitude as the legal brawl rages on over whether cable companies offering high-speed Internet services must share lines with their competitors.

But the Federal Communica-tions Commission has made one point clear: Even in the absence of federal intervention, it does not want thousands of local municipalities coming up with their own regulations.

''It is in the national interest that we have a national broadband policy,'' FCC Chairman Bill Kennard said in a speech in San Francisco last week. ''The FCC has the authority to set one, and we have. We have taken a deregulatory approach, an approach that will let this nascent industry flourish.''

But consumer groups say the flip side of this is that cable companies which are not regulated as ''common carriers'' control not only the wires, but the programs that people see.

Cable companies could also deprive consumers of content choice over the Internet, says Gene Kimmelman, co-director of the Consumers Union's Washington office.

Cable, phone, satellite and wireless companies are all racing to build these high-speed connections and win customers. So far, only about a million American homes have cable Internet hookups, compared with the more than 30 million on the Internet.

For this reason, the FCC says it is too early to pinpoint anti-competitive concerns and has declined to force cable companies to open up their lines to competitors.

But the FCC's hands-off policy hasn't deterred some local leaders from taking matters into their own hands.

A federal judge backed the decision by Portland, Ore., area cable officials ordering AT&T, after its acquisition of cable company Tele-Communications Inc., to open its high-speed cable lines to rival Internet companies. The company is appealing.

Commissioners in Broward County, Fla., voted for a similar requirement, prompting AT&T to file suit Monday.

Municipal officials assembled in St. Louis for the National Association of Counties meeting last week insisted in a resolution that ''it is essential that local government franchise authorities have the authority to require that all cable companies provide open access to Internet service providers.''

Federal regulators don't think that is an effective way to implement policy.

''The prospect of inconsistent rules and regulations promulgated by 30,000 local regulatory agencies does not produce a predictable regulatory environment,'' said Deborah Lathen, chief of the FCC's Cable Services Bureau, last week.

The commission plans to file a friend-of-the-court brief for AT&T's appeal of the Portland decision to explain the need for a national policy. On Monday, Kennard applauded the decision by San Francisco's city supervisors to approve the transfer of the cable franchise from TCI to AT&T, and hold off on forcing open access, pending the outcome of the Portland case.

The FCC's stance has drawn the ire of organizations like the openNET Coalition, a lobbying group AOL formed with other Internet providers and regional phone companies, that want access to the pipelines.

''Doing nothing while AT&T turns a cable monopoly into an Internet monopoly is not a policy; it's surrender,'' said Greg Simon, the coalition's co-director.

Others say that while the FCC's hands-off policy might get high-speed Internet service out to consumers more quickly, regulators will later on face a serious problem with a few companies dominating the market.

AT&T says its presence in the broadband arena has actually fueled competition, such as that among local phone companies that are speeding up the Internet services they offer and cutting prices.

The company also says that its foes are taking the issue to the local level as a last-ditch resort.

''They've been rejected at every other decision-making level,'' said Jim Cicconi, AT&T's general counsel.